The national economy is largely dominated by the informal sector, despite the country’s many natural resources and opportunities for developing entrepreneurship. This is evidenced by the fact that at least three million businesses operate in the informal sector, according to a study conducted by FTHM on the business environment this year and published by the EDBM (Economic Development Board of Madagascar). This represents an estimated tax potential of 147.9 billion ariary per year, it was reported. It has to be said, however, that the informal sector plays a key socio-economic role, generating 9 out of 10 jobs in Madagascar.
Unemployment rate of 4.8%
According to statistics published by the EDBM, an average of around one hundred new businesses are created every month. But this has had little impact on reducing unemployment, which has been on the rise in recent years, reaching 4.8% in 2022, compared with 3.5% the previous year. The arrival of 500,000 young people on the job market each year is also likely to reinforce the informal sector, given the low take-up of newly-created formal businesses. This is why the EDBM, like other support organizations and incubators, is promoting the development of entrepreneurship in Madagascar. In fact, there are many initiatives aimed at supporting project holders and start-ups. However, the national investment promotion agency has identified the main factors holding back entrepreneurship. These include lack of financing, ignorance of technical factors, lack of entrepreneurial culture and formalization.
Navalona R.